The Court of Appeal has overturned a controversial High Court decision dealing with legal privilege in a fraud and bribery investigation involving mining group ENRC.
At first instance the High Court had held that documents created by ENRC and its lawyers as part of an internal investigation were not subject to privilege and should be disclosed to the SFO, who were themselves investigating the allegations of bribery, fraud and corruption. The decision raised eyebrows in the legal community as it was seen to be narrowing the application of privilege in criminal investigations, discouraging investigation and self-reporting to regulators.
The Court of Appeal’s ruling means that the documents created in this fact finding process are protected under litigation privilege. However, the Court left open questions as to who within a large organisation can qualify as the ‘client’ to retain the benefit of legally privileged communications with its lawyers. It indicated that it not necessary agree with the current state of the law as set out in Three Rivers (No 5) and the more recent RBS Rights Issue Litigation decision.
Elaina Bailes, Senior Associate in the Commercial Litigation department was quoted in the FT article as saying:
“The quick delivery of the judgment is telling. There was a sense of urgency in resolving the issue and the court took on board concerns . . . that privilege was being eroded, particularly in criminal investigations.”
Elaina was also quoted in the Law Society Gazette, saying:
“The judgment gives much-awaited certainty on what potentially damaging documents lawyers and clients with claims before the English courts will have to disclose, and will also encourage engagement with regulators in criminal investigations.”
The Lawyer quoted Elaina as saying:
“The criticism at the decision of first instance was that in the context of criminal investigations the judgment that said litigation was in reasonable contemplation came in quite late. It was at a late stage when letters had been sent. The ENRC assumed that litigation was at reasonable contemplation because all of that had been done.”
“Basically, what this decision does is change that and moves it further towards the beginning of the process. If you have documents giving an honest view of whether you’ve committed criminal acts, you as a party now have more safety in self-reporting.”
The full FT article can be viewed here (subscription required): Miner ENRC wins appeal in key legal privilege case
The full Law Society Gazette piece can be accessed here: Landmark privilege win: appeal court rules against SFO in ENRC case
The Lawyer article can be read in full here (subscription required): Yes, the ENRC judgment is a relief but issues around legal privilege persist
Elaina was also quoted in a Times Law article on the topic which can be read here (subscription required): Privilege wins the day…for now
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